One year high for fixed rate mortgage lending
July 5, 2009 by admin
Filed under News, News-Mortgages
According to recently released figures fixed rate mortgage lending levels have recently hit their highest level in the space of around one year, as first time buyers and existing homeowners that are ready to refinance try and secure low rates clamour to take advantage of the all time low base rate, which still stands at 0.5 percent, which is the lowest level in the three hundred and fifteen year history of the Bank of England.
Nearly 70 percent of mortgage customers in April took out fixed rate deals according to officials.
The average loan rate being offered to those going onto these fixed rate mortgages is around 4.83 percent. The figures were released recently by the Council of Mortgage Lenders.
There was an increase of 16 percent in the number of fixed rate loans being taken out for property purchases, and the value of these fixed rate loans increased to around £4.5 billion.
There was a fall in the level of refinancing mortgage loans, and according to CML officials the reason behind this is that lenders are still exercising very strict lending criteria.
First time buyers are also struggling to get the most competitive fixed rate mortgage deals, with lenders demanding higher deposit levels and being far stricter about who they will give their most competitive deals to.
One official from the Council of Mortgage Lenders stated: “With the interest rate cycle now at its floor, an increasing proportion of borrowers are taking out fixed rates, including for longer term periods of five to 10 years. With expectations for rates to remain low in the near future, shorter term fixed-rate deals are less appealing than attractively priced variable rate deals.”
